Unsettled Asian Market

Details

September 16, 1997

If Royal Caribbean International (RCI) does not replace cruises cancelled following the sale of the Sun Viking, then the North American market in Asia will show a sizeable decrease in capacity next year, falling from an estimated 91,000 in 1997 to 74,000 in 1998.

The $30 million sale of the 714-passenger Sun Viking to Star Cruises translates into approximately a 20,000-passenger drop in North American capacity.

Replacing the Sun Viking, however, may be a problem. Other ships in the RCI fleet are at least twice the size, and according to reports, the port infrastructure is often not developed to handle ships of that size. In addition, RCI was said to have a bard time filling the Sun Viking, and obviously it won't be any easier to fill a bigger ship.

Meanwhile, other unconfirmed reports have RCI considering the replacement of the Sun Viking with Celebrity Cruises' 1,354-passenger Horizon or 1,374-passenger Zenith.

Previous rumors that RCI would send the Legend of the Seas to the Far East and Australia/New Zealand remain just that, unconfirmed rumors.

In the meantime, all passengers booked on the Sun Viking have been offered cruises on the company's other ships.

Local Market Leaders

On the heels of RCI's pullout came the announcement that Carnival Corporation and Hyundai Merchant Marine have terminated their joint venture, Carnival Cruises Asia, to launch the Tropicale in 1998. Both parties cited fundamental differences of opinion on the strategic direction of the joint venture.

None of this has deterred Star Cruises, however. Star Cruises now has seven ships and boasts an annual capacity of more than one million passengers. Thus, in only four years Star Cruises has become the third largest cruise company in the world in terms of passengers carried per year.

And, with the purchase of the 600-passenger Europa, to be renamed the MegaStar Asia, which will launch service in 1999, and two 75,000-ton, 2,000-passenger ships under construction for delivery in 1998 and 1999, plus plans to order two bigger and faster ships for delivery in 2000 and 2001, Star Cruises will clearly continue to grow.

A spokesperson told Cruise Industry News that as the company will be introducing at least one large new ship per year for the next several years, it will ensure continued interest in cruising in the Asian markets. "We will be able to introduce new ships in each market at different periods of the year by rotating our ships," the spokesperson said.

Besides investing in new ships, Star Cruises has also developed two cruise ports in Port Klang and on the island of Langkawi in Malaysia. The Sun Viking, which will be renamed Superstar Sagittarius, will launch seven-day service from Port Klang in January of 1998, based on air/sea packages sold in Australia and Europe.

Other developments in the local market include the 1997 launch of Metro Holdings' Sun Cruises, with the 1,084-passenger Sun Vista (ex­ Meridian) and the 114-passenger Sun Viva (ex­ Renaissance V).

American Operators

Several other operators who have tried year-round operations have also had a difficult time in the Far East. Windstar Cruises is pulling out after a decade in Tahiti. Orient Cruises has partially replaced Far Eastern sailings with cruises in Australia/New Zealand and to the Antarctic. And, long-time pioneer Pearl Cruises was shut down, when that company was acquired by Costa Crociere, citing unprofitability.

The North American market leader remains Princess Cruises, which sails seasonally in the region, and is slightly upping its capacity, sailing the 1,200-passenger Sky Princess and 610-passenger Island Princess as before, but adding Tahiti sailings aboard the 1,590-passenger Crown Princess in 1998 (replacing the 1,470-passenger Star Princess). The line's 1998 capacity will total 22,000, for a market share of 30 percent.

Another boost comes from Holland America Line, which will more than double its Asian capacity in 1998. Instead of sailing the 1,214-passenger Nieuw Amsterdam on a single, three­ segment cruise in the region, as it has this year, the vessel will feature seven distinct itineraries in Asia and the Pacific in 1998 - with that level of capacity scheduled to be maintained in 1999.

The biggest boost meanwhile will come from the early 1998 arrival of Radisson Seven Seas Cruises' new 15,000-ton, 320-passenger Paul Gaugin, which will be based in French Polynesia and sail year-round in the region. In addition, further future capacity increases are anticipated from Renaissance Cruises if the company completes negotiations for the 690-passenger R3 and R4, slated to sail year-round in French Polynesia beginning in 1999.